ABSTRACT

The paper characterizes the current crisis and discusses the perspectives of the world economy from an immediate and structural standpoint. Firstly, the analysis of the structural tendencies of profitability and accumulation after the overaccumulation crisis of the 1970s reveals that this is a crisis of the neoliberal restructuring processes, characterized by a return of the financial hegemony. The contradictory nature of neoliberalism was first manifested in the 2000-1 crisis, and showed more violently in the current one. Secondly, the immediate development of the crisis is described. The current cyclical recession in the United States is characterized by the bursting of the housing bubble, and the global financial crisis. Lastly, the perspectives for the world economy are addressed. From a structural viewpoint, it is contended that profitability and accumulation conditions in central capitalist countries do not hold for a long wave upswing; a massive devaluation of capital is a prerequisite of rapid accumulation, beyond the demise of financial hegemony. Despite the emergence of new poles of accumulation, leaded by China, the world economy faces a long period of slow growth and macroeconomic instability inasmuch as the contended hegemony of the United States economy, still the largest and most powerful, and the dollar, still the world money, is not being substituted, yet, by a new hegemonic center.

CONTENTS
1. Introduction …………………………………………………………………………………………………… 1
2. The structural context of the current crisis ……………………………………………………… 2
2.1 The 1970s profitability crisis ………………………………………………………………………….. 2
2.2 The neoliberal restructuring ………………………………………………………………………….. 4
2.3 The neoliberal long wave of slow growth ………………………………………………………… 8
2.4 From the 2000-1 crisis to the current crisis ……………………………………………………. 11
3. The immediate development of the current crisis …………………………………………… 15
3.1 The outbreak of the crisis ……………………………………………………………………………. 15
3.2 The banking crisis ……………………………………………………………………………………… 16
3.3 The world recession …………………………………………………………………………………… 18
3.4 The aftermath of the crisis ………………………………………………………………………….. 21
4. Perspectives of the current crisis ………………………………………………………………….. 23
Bibliography ……………………………………………………………………………………………………. 25
Statistical sources ……………………………………………………………………………………………. 27

1. INTRODUCTION

The paper characterizes the nature of the current crisis from a Marxist structural approach, which stresses the importance of the profitability and accumulation trends in the long-run economic development. The main hypothesis is that, though the current crisis is not related to the tendential fall in the rate of profit, it is a structural crisis that must be analyzed in the context of such structural trends. The paper also describes and analyzes the immediate development of the current crisis, paying attention to the concrete economic phenomena that spurred the crisis in relation to the structural conditions of valorization and accumulation. Finally, the paper also discusses the perspectives of the world economy in the aftermath of the crisis from an immediate and structural standpoint.

The paper is organized as follows. In section 2, the structural context of the current crisis is presented. The 1970s structural crisis is analyzed as a necessary antecedent of the consequent neoliberal restructuring, which is then described and analyzed. Finally, the 2000-1 crisis is identified as a precursor of the current one. Section 3 deals with the immediate development of the crisis. First, the cyclical factors that led to the crisis are first depicted, followed by its development into banking crisis and a world recession. Finally,the responses to the crisis and its results are analyzed. In section 4, the perspectives of the world economy are analyzed, relying on the previous structural and immediate characterization of the current crisis.

The current crisis outbreak and development: Interpretations and perspectives for the world economy

Paper to be presented at the CONGRÈS MARX INTERNATIONAL VI “CRISES, RÉVOLTES, UTOPIES” 22-25 September 2010, Université de Paris-Ouest-Nanterre-La Défense, France